AAMS Module 5 questions and answers
Gross Income - Income from all sources unless specifically excluded by tax law
Examples of income exclusions - Life insurance proceeds received by reason of
death of the insured, muni bond interest, gift/inheritance, workers comp, child
support, most scholarships received, and many employee fringe benefits
Deductions for AGI/Above the line deductions - Reduce total income dollar for
dollar. Examples: deductible IRA contributions, Keogh contributions for the
unincorparted business owner, qualified education interest, alimony paid, self
employed health insurance deductions, qualified job related moving expenses,
tuition and fees deduction, one half of the self employment tax, and the penalty
on early withdwal of savings
Gross Income - Technically, income from all sources, unless specifically excluded.
Examples include wages, commissions, tips, honorariums, interest, dividends, net
business income, rents, royalties, alimony received, unemployment
compensation, gambling income, and partnership income
Total Income - The amount reported about three-fourths of the way down the
front of the form 1040. Total income may be thought of as the gross income
reduced by all exclusions. Other items that are included in calculating total income
, AAMS Module 5 questions and answers
are items that reduce the income. Some of these items may include losses from
sole proprietorships or up to $3,000 of net capital losses
Adjusted Gross Income - The amount remaining after subtracting adjustments to
income
Taxable Income - Adjusted gross income reduced by personal and dependency
exemptions and further reduced by the greater of the standard deduction or
itemized deductions
Adjustments to income - Items that reduce total income to arrive at adjusted
gross income. Examples include deductible IRA contributions, self employed
health insurance deduction, Keogh contributions, qualified job related moving
expenses, alimony paid, and penalties on early withdrawal of savings. Often
referred to as above the line deductions or deductions for AGI
Exclusions - Items of income that represent an economic benefit but are not
included as income: includes life insurance proceeds received, a gift or inheritance
received, workers compensation benefits, child support received, municipal bond
interest, and many employee fringe benefits
Gross Income - Income from all sources unless specifically excluded by tax law
Examples of income exclusions - Life insurance proceeds received by reason of
death of the insured, muni bond interest, gift/inheritance, workers comp, child
support, most scholarships received, and many employee fringe benefits
Deductions for AGI/Above the line deductions - Reduce total income dollar for
dollar. Examples: deductible IRA contributions, Keogh contributions for the
unincorparted business owner, qualified education interest, alimony paid, self
employed health insurance deductions, qualified job related moving expenses,
tuition and fees deduction, one half of the self employment tax, and the penalty
on early withdwal of savings
Gross Income - Technically, income from all sources, unless specifically excluded.
Examples include wages, commissions, tips, honorariums, interest, dividends, net
business income, rents, royalties, alimony received, unemployment
compensation, gambling income, and partnership income
Total Income - The amount reported about three-fourths of the way down the
front of the form 1040. Total income may be thought of as the gross income
reduced by all exclusions. Other items that are included in calculating total income
, AAMS Module 5 questions and answers
are items that reduce the income. Some of these items may include losses from
sole proprietorships or up to $3,000 of net capital losses
Adjusted Gross Income - The amount remaining after subtracting adjustments to
income
Taxable Income - Adjusted gross income reduced by personal and dependency
exemptions and further reduced by the greater of the standard deduction or
itemized deductions
Adjustments to income - Items that reduce total income to arrive at adjusted
gross income. Examples include deductible IRA contributions, self employed
health insurance deduction, Keogh contributions, qualified job related moving
expenses, alimony paid, and penalties on early withdrawal of savings. Often
referred to as above the line deductions or deductions for AGI
Exclusions - Items of income that represent an economic benefit but are not
included as income: includes life insurance proceeds received, a gift or inheritance
received, workers compensation benefits, child support received, municipal bond
interest, and many employee fringe benefits
